Thursday, November 14, 2019

Grain prices were mixed over the past week, and remain rangebound. The biggest news was the USDA report on November 8, and there wasn’t enough there to move markets decisively.

The corn yield was lowered 1.4 bu/acre from the October report to 167 bu. Usage was lowered in every category for a total 100 million bu., which pretty much wiped out the lower production. The carry out (CO) was pegged at 1.91 billion bu, compared to 2.114 for the 2018/19 crop.

The soybean yield was left unchanged at 46.9 bu/ac. Traders had expected a small reduction. Crush was dropped a minor 15 million bu, so the CO increased the same amount from the Oct estimate to 475 million bu. That is still a nice drop from last year’s 913 million., however.

Wheat fundamentals were tweaked only marginally. The final CO is now expected to be 1.014 billion bu, versus 1.043 predicted last month. The previous crop year CO was 1.08 billion., so the CO is hanging in at just over 1 billion bu.

Brazil weather has improved, with more rain in most areas except the south. It’s too early to kill this crop, but traders’ attention will divert to South American weather over the next few weeks.

US basis levels are firm, with the eastern grain belt trading at a huge premium to the western belt, where supplies are more plentiful. The strength in the former is helping Ontario basis levels trade at higher levels than normal for this time of year.

China is resuming pork and beef imports from Canada, despite a very poor trading relationship since we arrested the Huawei executive for extradition to the US. It is likely more because they need the meat protein than better trade relations.

The roller coaster China/US trade news continues. It’s positive one day and negative the next. With Trump impeachment public hearings starting tomorrow, it is likely China will stall for longer, hoping that he does lose his job.

Winter conditions are hitting most of the Us and Canada earlier than normal. This will slow harvest activity further. The 8 to 14 day forecasts show a warming trend, and below normal precipitation, however.

There’re still a lot of soybeans out in field, and very little corn off. Hopefully, the better forecast will be right. 2019 has been stressful enough all year for most farmers. A bit of Indian summer would sure be appreciated.